Duminda Hulangamuwa, the new Country Managing Partner of EY Sri Lanka and the Maldives, highlights the key strengths and values of the firm, including its extensive branch network and global resources, commitment to Building a Better Working World through its client-focused approach, adherence to high ethical standards, and prioritization of ESG considerations. He also explains how EY is helping businesses navigate the challenging economic environment and contributes to shaping decisions and policies that contribute to the long-term success of Sri Lanka’s business ecosystem through active collaboration with the government and participation in industry reforms.
As the new Country Managing Partner of EY Sri Lanka & Maldives, what do you see as the key strengths and unique characteristics of EY?
EY Sri Lanka has a rich history spanning over a century, dating back to its establishment in 1905. Although it has undergone several name changes, our presence has remained constant, transitioning from British to Sri Lankan ownership. In the late 1980s, EY Sri Lanka merged with Arthur Young International and became Ernst & Young, solidifying its position as a prominent player in the country’s professional services landscape.
Today, EY Sri Lanka stands as one of the largest firms in the nation, serving a diverse clientele ranging from multinational corporations to local conglomerates and small and medium-sized enterprises (SMEs). Our extensive branch network, unparalleled among accounting firms in Sri Lanka, further sets us apart.
Our key strengths lie in our people and our partnership. With Partners both in Sri Lanka & Maldives, guiding our operations. Unity and a wealth of expertise encompassing diverse fields such as Assurance, Tax, Consulting, and Strategy & Transactions define this partnership as we leverage the collective knowledge and skills of our over 1,000 employees to deliver sustainable and high-quality services to our clients.
Moreover, as part of the global EY network, we have access to a vast talent pool of over 400,000 professionals across 150 countries, enabling us to tap into the expertise, experience, and resources of EY’s global presence, allowing us to provide tailored solutions to our clients in Sri Lanka and the Maldives. Regardless of the nature or complexity of the challenge, we can assemble a team of specialists from around the world to deliver the required services.
EY Sri Lanka combines the advantages of being a multinational and a local firm. We possess the resources, tools, strengths, and skills of a global organization and retain a deep understanding of the local business environment; this unique blend enables us to offer comprehensive solutions in Assurance, Tax, Consulting, and Strategy & Transactions, and fostering a sustainable business environment for our clients.
What values define EY in a rapidly changing business landscape? How do they guide the firm’s decision-making processes and interactions with clients and stakeholders?
Our purpose defines us. And that purpose is to fulfil our value proposition of Building a Better Working World, which encapsulates our commitment to our clients, employees, and the Firm.
When it comes to our clients, we strive to provide services that create a sustainable business environment for them to thrive. We understand that all our service lines, whether Assurance, Tax, Consulting, or Strategy & Transactions, require highlevel expertise. In an increasingly complex world, EY Sri Lanka & Maldives is well-equipped to handle complicated and dire situations while upholding our core principles of legality, ethics, independence, and professionalism, ensuring our clients and stakeholders can trust our professional advice and guidance.
Our employees are at the heart of our ecosystem. We place great importance on integrity, diversity, and creativity, so we seek individuals who share our core values, fostering a consistent approach across all EY firms worldwide. We create inclusive office spaces to recognize and celebrate diversity, integrity, and our firm’s culture. All our employees adhere to EY’s rules and ethics, including strong independence standards when reporting on financial statements and executing transactions for our clients. We have clear principles of non-discrimination, valuing performance above all else, which has contributed to our success globally and in Sri Lanka.
In terms of client service, we prioritize long-term sustainability over short-term deals. Our focus extends beyond financial considerations to encompass environmentally sustainable solutions whenever possible. Environmental, Social, and Governance (ESG) factors are integral to EY, and we hold ourselves accountable to our clients, employees, and society.
Globally there is increasing focus on ESG, and there is a lot of capital chasing after ESG-compliant companies. Where does ESG rank in the Sri Lankan business sphere?
Environmental, Social, and Governance considerations are gaining crucial importance in Sri Lanka and the Maldives, and there is a growing commitment in the corporate sector to ensure that our actions do not harm the environment and that we comply with relevant standards. However, ESG reporting in Sri Lanka is still developing compared to OECD countries which place greater emphasis on environmental compliance systems and processes.
Sri Lanka needs to align with global environmental standards. It receives funding from multi-lateral institutions to improve in this area, so it is crucial for businesses especially those who seek access to Western markets to demonstrate compliance with environmental regulations because sustainability-related certifications are required by Sri Lankan companies that supply global buyers, ensuring their adherence to environmental compliance.
ESG compliance is rapidly gaining momentum in Sri Lanka. Various awards, such as those for corporate reporting and planning, as well as recognition from organizations like the Ceylon Chamber of Commerce, consider the contributions made to the environment and adherence to social sustainability and governance. Sri Lankan corporations are increasingly prioritizing environmental concerns, although we are still on the path to catching up with the developed nations of the OECD.
Given our small country and significant population, protecting our environment becomes vital. More Sri Lankan companies, the government sector, and individuals must prioritize the environment and sustainability. However, we are progressing and rapidly moving towards environmental and sustainability goals.
What does EY bring to the table when you talk about companies doing ESG?
We have a crucial role in promoting ESG practices by leveraging our global knowledge and initiatives. We bring international standards to the attention of our clients, helping them understand and adopt best practices in ESG. For instance, in countries with tax exemptions or reductions for environmental initiatives such as carbon emissions, we guide our clients on leveraging these opportunities.
We aim to share our global experience with clients, emphasizing the importance of aligning with international ESG standards. By doing so, we assist them in demonstrating their commitment to sustainability and enhancing their company’s value. As businesses increasingly access global markets, ESG considerations are becoming a common requirement. Therefore, we utilize our international exposure to help develop ESG practices within the Sri Lankan and Maldivian markets
During this challenging period, our focus has been on demonstrating the commitment of multinational firms to our clients. We have worked hand in hand with them, providing solutions tailored to their needs. Despite the complexities, we remain dedicated to assisting our clients in various ways and offering valuable support
We also recognize the importance of involving the government in ESG efforts. Exploring avenues for potential tax reductions or exemptions linked to projects adhering to ESG guidelines is an area of focus. By engaging in discussions with the government, we aim to create incentives that encourage companies to prioritize ESG practices. This approach ensures that ESG becomes an attractive and beneficial path for businesses.
Ultimately, through our expertise and collaboration with various stakeholders, including clients and government entities, we strive to foster ESG awareness and create a supportive environment for sustainable practices in Sri Lanka.
EY places a strong emphasis on nurturing talent and developing its employees. What initiatives do you plan to implement to foster a culture of continuous learning and professional growth among the employees at EY Sri Lanka?
Talent retention is one of the biggest challenges we face in Sri Lanka. The migration of skilled professionals – particularly accounting professionals – and the labour shortage in other markets pose significant difficulties. Countries like the UK and Ireland have a high demand for accountants, resulting in the departure of experienced staff from our firm over the past year.
This challenge necessitates our focus on developing the next generation of professionals. EY took the initiative by establishing a program with Sri Jayawardenapura University around 20 years ago. We provided scholarships and internship opportunities to graduates from that university, and others have followed suit. Currently, we are engaging with private and state universities to absorb undergraduates into our system. By capturing talent at an early stage and providing the necessary training, we aim to address the talent gap.
Additionally, in light of the Covid-19 pandemic, many young graduates and undergraduates have relocated to their hometowns and provinces, showing reluctance to return to Colombo due to the high cost of living and their adjusted lifestyle. We are overcoming this hurdle by leveraging our satellite offices in Kandy, Kurunegala, Matara, Galle, and Hambantota, allowing individuals to work from their home provinces, reducing costs, and providing them with the convenience of commuting from their residences. We strive to maximize remote work capabilities and reach out to talented individuals in different locations to mitigate the talent shortage issue.
Furthermore, we are exploring IT solutions to optimize efficiency and reduce infrastructure costs, and certain functions that previously required multiple personnel now need one person. This tech approach helps us balance cost, efficiency, and talent retention. It’s important to note that talent retention and attraction are ongoing challenges faced by industries worldwide. We are continuously seeking solutions and adapting to the changing economic landscape. While new problems emerge daily, we remain determined to face them head-on and overcome them through proactive measures.
Clients and the general public rely on professional services firms for trust and expertise. How is EY Sri Lanka & Maldives reassuring its clients and helping them to navigate these challenging times?
The current economic landscape presents multiple challenges as we recover from the financial crisis. Industries face unique difficulties, with the most prominent issue being the contraction of demand due to the economic downturn. To address this, we support clients across four main pillars, Assurance, Tax, Consulting, and Strategy & Transactions.
In a nutshell, our teams in Sri Lanka and the Maldives advise clients on complex taxation policies so they can contribute meaningfully to the well-being of the economies they represent. Also, ringfenced advisories assist clients in reducing costs, managing working capital challenges, and optimizing supply chains to minimize disruptions. In the past, we leveraged the extensive EY network to help local conglomerates navigate dollar shortages, import crises, and foreign exchange volatility. By reorganizing structures and accessing foreign resources, we aimed to mitigate the vulnerability of operating in international markets.
Furthermore, we advised and guided clients on restructuring their businesses and adapting to changing circumstances. For SMEs, survival and overcoming interest rate crises are significant challenges. While there are no overnight solutions, we have collaborated closely with them, offering solutions, advice, and support to navigate the challenging economy and maybe even unlock opportunities.
During this challenging period, our focus has been on demonstrating the commitment of multinational firms to our clients. We have worked hand in hand with them, providing solutions tailored to their needs. Despite the complexities, we remain dedicated to assisting our clients in various ways and offering valuable support.
How does EY plan to use its influence to shape decisions and policies that can contribute to the long-term success of Sri Lanka’s business ecosystem?
Through my role in the Ceylon Chamber and with the support of EY, we have closely collaborated with the government over the past two years. We have aimed to navigate through various reforms and communicate the necessary messages to the public, emphasizing patience and downsizing certain institutions. We have conducted extensive programs utilizing local media and participated in discussions to contribute to policymaking, reform, and public acceptance.
Through my role in the Ceylon Chamber and with the support of EY, we have closely collaborated with the government over the past two years. We have aimed to navigate through various reforms and communicate the necessary messages to the public, emphasizing patience and downsizing certain institutions. We have conducted extensive programs utilizing local media and participated in discussions to contribute to policymaking, reform, and public acceptance.
Additionally, my colleagues are instrumental in assisting the government with net debt negotiation and local debt restructuring. As accountants, they have played a vital role in advising clients, restructuring balance sheets, mitigating risks, and providing guidance on the impact of debt restructuring on financial statements.
Different individuals have diverse roles in policy advocacy, formulation, and reforms. EY has significantly contributed to accounting standards, prioritizing reform and taxation in today’s economy. In the past, we have also played a crucial role in developing accounting standards for the agriculture and plantation sectors, participating in several other government initiatives focused on reorganizing institutions and driving industry reforms. Overall, EY has actively contributed to shaping the economy and promoting transformation in collaboration with the government and the private sector, and this is a commitment that will continue to deepen.